KUALA LUMPUR (Jan 2): The Nikkei Malaysia Manufacturing Purchasing Managers' Index (PMI) contracted to 49.9 points in December 2017 as business conditions in the sector broadly stagnated.

The fall in the headline PMI from a 47-month high of 52 points in November was driven by a contraction in new orders and slower output growth, according to IHS Markit, which compiles the survey.

While firms had raised their payroll numbers to meet production requirements, job creation had slowed, IHS Markit remarked in a note today.

"On the price front, input cost inflation remained sharp overall and continued to place pressure on firms' margins," it added.

Purchasing activity was reported to have deteriorated in December at the strongest rate since September, due to subdued demand conditions. 

Meanwhile, outstanding business declined for a seventh successive month, indicating ongoing spare capacity, IHS said.

"Businesses retained positive forecasts for outputover the next 12 months (on) projections of an improvement in underlying demand conditions," it noted.